2024-08-02 19:00

Aug 2 (Reuters) - A tropical storm is expected to form off Florida this weekend after a disorganized weather system crosses Cuba, bringing howling winds, torrential rain and ocean surges to the Keys and the state's Gulf Coast, forecasters said on Friday. The storm will deliver up to 12 inches of rain and winds up to 73 mph as it moves northward, the National Hurricane Center said. At some point, the storm will move inland and reemerge along the Atlantic Seaboard to begin a slow crawl along the Georgia and Carolina coastlines early next week. Florida Governor Ron DeSantis has already put the majority of the state's cities and counties under emergency orders ahead of the expected landfall. "It's over Cuba right now," said NHC Deputy Director Jamie Rome said in an interview on Friday. "We are anticipating it to turn into a tropical storm over the weekend. Right now it's a broad, sloppy system but we expect it to become more organized when it's back over Gulf waters." If the storm swells into a tropical storm - with winds between 39 mph and 73 mph - it will take the name Debby. U.S. forecasters expect a large number of Atlantic hurricanes to form in the 2024 season, which began June 1, with four to seven major hurricanes forming out of a total of 25 named storms. That is more than during 2005's record breaking season that spawned hurricanes Katrina and Rita. Only one hurricane, Beryl, has formed in the Atlantic so far this year. The earliest Category 5 storm on record, it ravaged the Caribbean and Mexico's Yucatan Peninsula before rolling up the Gulf Coast of Texas as a Category 1 storm, with winds up to 95 mph. Regardless of whether the current system strengthens into a tropical storm, Rome emphasized that it will bring as much as a foot of rain to parts of Florida. "People often use wind speed as a proxy for how dangerous a system is," Rome said. "But this is a classic case to not do that. The rain rate, it comes down so quickly, makes it dangerous." He said it is too soon to say exactly when or where the storm might make landfall this weekend. Tropical storm watches and warnings have already been issued for the Florida Keys and the Gulf Coast. Key West Mayor Teri Johnston said his tiny island community was "well prepared but not worried" about the storm. "Everyone's on it, everyone knows what to do. Load up on 3-to-7 days of supplies and water, batteries, remove all potential projectiles from the yard," she said. "We're ready." The storm is expected to follow a similar track as the deadly 2022 Hurricane Ian, which killed at least 103 dead in Florida and did billions of dollars in damage as it made its way along the Gulf Coast. Sign up here. https://www.reuters.com/business/environment/florida-braces-tropical-storm-expected-hit-gulf-coast-2024-08-02/

2024-08-02 18:44

Canada-U.S. 2-year spread narrows by 11 basis points Price of U.S. oil tumbles 3.8% Ten-year yield hits 15-month low at 2.947% TORONTO, Aug 2 (Reuters) - The Canadian dollar edged higher against its American counterpart on Friday as a slowdown in U.S. jobs growth helped reduce unfavorable interest rate differentials for the loonie, offsetting a sharp drop in oil prices. Canada's currency was trading 0.1% higher at 1.3860 per U.S. dollar, or 72.15 U.S. cents, after touching on Thursday its weakest intraday level since November at 1.3889. The loonie was down 0.2% on the week, its third straight weekly decline. The U.S. unemployment rate jumped to near a three-year high of 4.3% in July amid a significant slowdown in hiring, potentially making the economy vulnerable to a recession." "Rate differentials are narrowing in the Canadian dollar's favour as the Federal Reserve is seen joining the Bank of Canada in an aggressive easing cycle," said Karl Schamotta, chief market strategist at Corpay. The gap between U.S. and Canadian 2-year yields narrowed by 8 basis points to 72 basis points in favor of the U.S. rate as traders piled into bets that the Federal Reserve would deliver a larger-than-normal half-percentage-point interest rate cut in September, when it is expected to begin an easing cycle. The Bank of Canada has already cut rates twice since June, moving in 25-basis-point increments. Investors expect another cut in September, while the chances that the BoC would step up the easing pace to 50 basis points climbed to 26%, swaps market data showed. The U.S. dollar (.DXY) , opens new tab weakened against a basket of major currencies and stocks on Wall Street tumbled, while the price of oil CLc1>, one of Canada's major exports, settled 3.7% lower at $73.52 a barrel as the U.S. data clouded the outlook for crude demand. The Canadian 10-year yield fell 11 basis points to 2.998% after earlier touching its lowest level since May 2023 at 2.947%. Sign up here. https://www.reuters.com/markets/currencies/c-edges-higher-interest-rate-differentials-narrow-2024-08-02/

2024-08-02 17:56

Aug 2 (Reuters) - U.S. energy firms this week cut the number of oil and natural gas rigs operating for the first time in three weeks, energy services firm Baker Hughes (BKR.O) , opens new tab said in its closely followed report on Friday. The oil and gas rig count, an early indicator of future output, fell by three to 586 in the week to Aug. 2. , , Baker Hughes said that puts the total rig count down 73, or 11%, below this time last year. Baker Hughes said oil rigs were steady at 482 this week, while gas rigs fell by three to 98. In the Denver-Julesburg (DJ)-Niobrara basin in Colorado, Wyoming, Nebraska and Kansas, drillers cut one rig, bringing the total down to 9, the lowest since June 2021. In the Marcellus Shale in Pennsylvania, West Virginia and Ohio, drillers cut one rig, bringing the total down to 24, the lowest since September 2020. In the Permian Shale in West Texas and eastern New Mexico, drillers cut one rig, bringing the total down to 303, the lowest since February 2022. In California, drillers added one rig, bringing the total up to 8, the most since January 2022. In Colorado, drillers cut one rigs, bringing the total down to 13, the lowest since February 2022. In Texas, drillers cut two rigs, bringing the total down to 274, the lowest since January 2022. The oil and gas rig count dropped about 20% in 2023 after rising by 33% in 2022 and 67% in 2021, due to a decline in oil and gas prices, higher labor and equipment costs from soaring inflation and as companies focused on paying down debt and boosting shareholder returns instead of raising output. U.S. oil futures were up about 2% so far in 2024 after dropping by 11% in 2023, while U.S. gas futures were down about 24% so far in 2024 after plunging by 44% in 2023. Latest government data showed U.S. crude oil production fell in May in its first monthly decline since January, while natural gas output decreased in the month to its lowest since February 2023. Meanwhile, Exxon Mobil (XOM.N) , opens new tab boosted its profit in the second quarter partly due to volume gains from its purchase this year of shale oil firm Pioneer Natural Resources. The top U.S. oil producer increased its annual capital expenditure guidance to $28 billion from the previously estimated $23-$25 billion. The results also showed higher cash flow from operations which will help fund higher share buybacks and dividends. It also plans to buy back $19 billion in shares this year, the largest share repurchase program among its top Western rivals, up from $17.4 billion last year. Sign up here. https://www.reuters.com/business/energy/us-drillers-cut-oil-gas-rigs-first-time-three-weeks-baker-hughes-2024-08-02/

2024-08-02 17:49

WASHINGTON, Aug 2 (Reuters) - The first U.S. nuclear plant to ever try reopening after undergoing preparations for permanent closure is not fit to restart anytime soon because it sidestepped important safety work for years before retirement, a former official at the reactor said. Power company Entergy (ETR.N) , opens new tab closed the Palisades reactor in Michigan in 2022, after the plant generated electricity for more than 50 years. Privately-held Holtec International bought Palisades shortly after and has since secured a $1.52 billion conditional U.S. loan guarantee to restart. Holtec seeks to open the plant in about a year. The fate of Palisades is closely watched by the nuclear industry as at least two other shuttered plants, including a unit at Constellation Energy's (CEG.O) , opens new tab Three Mile Island, consider reopening. The administration of President Joe Biden sees nuclear power as a critical tool in the fight against climate change and supports efforts to restart closed plants, delay retirements of existing ones, and speed permitting for new projects. "I'm pro-nuclear, but they selected the wrong horse to ride to town on," said Alan Blind, who was engineering director at the Palisades plant from 2006 to 2013 under Entergy. Blind said the plant got exemptions from the U.S. Nuclear Regulatory Commission, the nuclear safety regulator, allowing it to fall short of safety design standards that more modern plants must adhere to because it was nearing retirement. Those safety standards include prevention of cooling systems being clogged by the breakdown of insulation on pipes, defense against earthquakes, and reduction of risks to fires, Blind said, adding he had been monitoring the plants’ exemption requests since his retirement. "I'm worried that the NRC will not insist that the generic safety issues be the fixed before they allow Palisades to restart," Blind told Reuters. Scott Burnell, an NRC spokesperson, said the safety review of Holtec's applications "will include examining how Holtec plans to follow through on technical issues, such as what Mr. Blind describes, that were unresolved when the plant shut down in 2022." "Those plans will be public to the greatest extent possible," and the NRC will allow a restart only if Holtec meets safety and environmental requirements. Burnell added NRC will soon offer an opportunity to offer legal challenges to Holtec's requests to restart, a standard procedure. Holtec believes Palisades can restart in about a year within the NRC's existing regulatory framework, said spokesperson Pat O'Brien. "As part of the repowering, Palisades will undergo extensive inspections, testing, maintenance, system and equipment upgrades and modifications to ensure the continuation of safe and reliable operation throughout the plant’s extended operational life," O'Brien said. Entergy supports the effort to re-open Palisades, said spokesperson Mark Sullivan. He did comment on Blind's concerns about safety standards at the plant. Entergy shut Palisades in May 2022, two weeks ahead of schedule over a glitch with a control rod, despite a $6 billion federal program to save nuclear plants suffering from rising costs and competition from natural gas and renewable energy. The Biden administration's Loan Programs Office at the Department of Energy issued Holtec a conditional $1.52 billion loan guarantee in March to restart Palisades. The LPO referred questions to the NRC. Sign up here. https://www.reuters.com/business/energy/us-nuclear-plant-unfit-quick-resurrection-former-lead-engineer-says-2024-08-02/

2024-08-02 17:25

Aug 2 (Reuters) - Ameren Corp (AEE.N) , opens new tab has agreed to power a data center with a capacity of 250 megawatt, a move that would boost its sales, the public utility firm said on Friday. The agreement would represent about 40% and 5% annualized increase to subsidiary Ameren Missouri's industrial megawatt (MW) hour sales and total megawatt hour sales, respectively, CEO Martin Lyons told analysts during a post-earnings call on Friday. Many tech-focused companies are turning to utilities to help power data centers, which support technologies like artificial intelligence and cloud computing. Ameren has also received expansion commitments and executed new contracts for over 85 MW of additional load for smaller data centers and other industries, across Missouri and Illinois. "We have seen a significant increase in the number of data center inquiries and formal engineering reviews are underway, which would represent thousands of megawatts of additional demand," Lyon said. The St. Louis, Missouri-based firm posted profit of $258 million or 97 cents per share on Thursday, compared to $237 million or 90 cents per share, last year. The utility benefited from an increase in electric retail sales, as customers cranked up their cooling appliances to deal with hot weather. Sign up here. https://www.reuters.com/business/energy/ameren-inks-250-mw-power-supply-deal-data-center-2024-08-02/

2024-08-02 15:48

NEW YORK, Aug 2 (Reuters) - A sharp drop in U.S. stocks is provoking selling from volatility-sensitive funds, exacerbating a selloff that has already brought the Nasdaq Composite (.IXIC) , opens new tab into correction territory. Volatility control funds - systematic investment strategies that typically buy equities when markets are calm and sell when they grow turbulent - have gorged on stocks as indexes soared to record highs in 2024. More recently, they have begun selling, as worries over the economy and tech earnings rattle investors: volatility control funds have dumped about $83.6 billion of U.S. equity futures over the last two weeks, according to Charlie McElligott, managing director Cross-Asset Strategy at Nomura. It's "extremely rare" for the funds to sell in that size, McElligott said, noting that they have only recorded a sharper pullback in their equity allocations 3.2% of the time in the last 10 years. The moves come on the backdrop of a selloff in U.S. stocks that deepened on Friday, after weaker than expected U.S. employment data spurred recession fears. The S&P 500 (.SPX) , opens new tab has slipped about 5% from its July 16 record high, while the tech-heavy Nasdaq Composite Index (.IXIC) , opens new tab, has slipped about 10% from a record high reached last month, putting it on pace to confirm a correction. The Cboe Volatility Index (.VIX) , opens new tab stands at its highest level in more than 16 months. The funds’ behavior going forward depends on how volatile markets are in the next few weeks, McElligott said. A 1% daily change in the S&P 500 over the next two weeks could spur another $15 billion of selling in that period, while daily 0.5% changes would stop the bleeding and see these funds turn buyers to the tune of about $14 billion, McElligott said. Certain other slower-reacting volatility-sensitive strategies could also join the selling if the market selloff worsens. Equities trend-following commodity trading advisers (CTAs) sold only about $12.5 billion over the last two weeks. But these systematic, rule-based investment strategies could ramp up selling to about $36.0 billion if the S&P 500 were to sell off another 4% over the next two weeks, McElligott said. Sign up here. https://www.reuters.com/business/finance/volatility-linked-funds-dump-us-stocks-exacerbating-selloff-2024-08-02/